Venezuela has agreed to drop out of the hotly contested race for Latin America's open seat on the UN Security Council and asked Bolivia to run in its place.

Venezuela has agreed to drop out of the hotly contested race for Latin America's open seat on the UN Security Council and asked Bolivia to run in its place, Bolivia's president has said.

"Comrade (Venezuelan President Hugo) Chavez says that to find a consensus he leaves the candidacy to Bolivia," President Evo Morales said at a ceremony with small business owners in the La Paz suburb of El Alto on Tuesday.

US critic Venezuela has battled for the seat against US-backed Guatemala but neither country was able to win the two-thirds majority needed to win the spot after three-dozen polls at the UN General Assembly.

Despite trailing Guatemala in nearly all the votes, Caracas has refused to drop out.

"We are candidates for the Security Council," Morales, one of Chavez's closest allies, said. "Hopefully we will obtain a consensus."

"Last night, Venezuela's ambassador called me first. Then commander Chavez called me and told me that since he was unable to get two-thirds for the Security Council," Caracas was giving up its candidacy for Bolivia, he said.

The General Assembly was scheduled to resume voting on Latin America's non-permanent, open seat on Wednesday.